Are hybrid cars a sound investment?

Hybrid vehicles offer the advantages of electric and petrol technology under one bonnet, providing road users with improved fuel consumption, environmental performance and long distance range. In an era when the automobile industry is developing rapidly, hybrids appear to provide users with the best of both worlds, future proofing against any foreseeable changes in car fuel technology.

Different types of hybrid

Hybrid vehicles are capable of delivering a range of performance alternatives, with ‘mild’ hybrids offering lower performance than ‘pure’ or ‘plug-in’ hybrids. Mild hybrids normally use a stop-start system, which turns off the engine when braking, coasting or idling, or utilises electric power as a minor supplement to the petrol engine, rather than powering the car alone.

A full hybrid vehicle has an electric motor and a fully rechargeable battery, which can work independently or in conjunction with each other. Full hybrids will typically allow you to drive in pure electric at low speeds, before utilising the combustion engine at higher speeds, or as an aid when accelerating. A full hybrid system will intelligently select the most appropriate power source and is capable of recharging the battery through regenerative braking.

Plug-in hybrids are the most commonly manufactured vehicles nowadays, and typically range from compact two-seaters to nine-passenger sports utility vehicles, with many models based on conventional vehicles, like the Honda Jazz, while others have unique designs, like the Honda CR-Z or Toyota Prius.

Price

On average, full hybrids are around £4,000, or 20 per cent, more expensive than petrol equivalents, costing another additional £1,400 to own and operate. For example, the Citreon DS5 2.0 Hybrid, which combines diesel and electric power, costs £28,560; a similar 2.0 HDI version costs just £23,960.

Price differentials are typically associated with the higher average costs associated with producing a hybrid vehicle, as a result of more expensive production processes and lower economies of scale. In order to benefit from improved fuel efficiency and environmental performance, buyers therefore pay a heavy premium.

Fuel efficiency

Full hybrids provide much better total mileage than mild hybrids as they utilise electric power, which has a higher fuel efficiency, more frequently; this is particularly evident for light or ‘city’ drivers, who drive primarily at low speeds:

“For highway drivers, hybrid and plug-in vehicles cost more without much benefit to the environment… But for drivers who experience a lot of idling and stop-and-go traffic, a hybrid could lower lifetime costs by 20 per cent and cut greenhouse gas emissions in half,” said Jeremy Michalek, a professor of mechanical engineering.

Hybrids will therefore bring lower fuel savings for heavy motorway users who drive at top speeds. However, the reality is that most buyers will use a combination or city and motorway driving, which should provide medium fuel efficiency gains overall.

Value for money or “payback”

The extent to which hybrids provide value for money depends on whether fuel efficiency gains can provide “payback” for the higher price over time. A recent study by CarGurus.com has questioned whether this is in fact the case:

“The hybrid premium tends to considerably outweigh any savings you might see in reduced fuel costs. In 76 per cent of the cars we examined, the cost of ownership was significantly higher than the cost of ownership of the same petrol-only model,” said Langley Steinert, founder and CEO of CarGurus.com.

The Government’s Plug-in Car Grant, can help to neutralise this problem, providing buyers with a £5,000 discount off the price of a new ultra-low carbon car. However, buyers are currently limited to a small selection of hybrid models, including the Toyota Prius, the Volvo V60 and the Vauxhall Ampera/Chevrolet Volt.

Like electric vehicles, hybrids remain a relatively small niche; of the 10.5 million vehicles sold in the United States last year, 290,232 were hybrids. With high premiums charged, hybrid technology is a luxury few can afford, with the majority of buyers either being particularly environmentally motivated or having large enough incomes to absorb the additional costs.

Without immediate costs savings, particularly for long distance drivers, it will clearly take a while until the mass market catches on. However, as the price of fuel rises over time, and relative costs of production fall, hybrid vehicles are likely to become accessible to a higher percentage of motorists.

In the meantime, the models included in the Government’s Plug-in car grant scheme will provide excellent value-for-money, providing buyers with all the advantages of hybrid technology without the off-putting price premium. In this respect, now could be time to trade-in your gas guzzler for a more environmentally friendly alternative.

This article was written by Luke on behalf of asm-autos.co.uk, a market leader in the ‘value my car’ industry and one of the UK’s most modern and professional vehicle salvage agents.